Card Payments Drop as Mobile Money Use Grows in Kenya
Friday, January 23, 2015
Payments made using plastic cards dipped by a fifth in 11 months to November last year as mobile phone-based payments ate into commercial banks’ business.
The latest Central Bank of Kenya (CBK) data shows that card payments plunged 18.2 per cent to Sh1.1 trillion as at the end of November, compared to Sh1.4 trillion a year earlier.
In contrast, the volume of cash sent through mobile platforms grew by a quarter to gross Sh2.1 trillion over a similar period – nearly double the value of card payments.
The Kenya Bankers Association (KBA) — the banking industry lobby — attributed the drop in payments done using cards to the growing uptake of mobile money.
“Mobile money alternatives are more convenient than cards,” said Habil Olaka, chief executive of KBA.
“When other new payment alternatives arrive, they eat into the share of existing platforms,” Mr Olaka told Business Daily. The decline in card payment volumes comes at a time when banks have migrated to issuing new generation chip-and-PIN cards from the fraud-prone magnetic stripe type.
Source: AFKInsider (link opens in a new window)